FedEx (FDX) has a beta of 1.50, the return on a 10-year U.S. Treasury bond, rrf, is 3.40%, and we use a stock market risk premium of 5.5%, thus, [rM - rrf ] = 5.5%. Given the equation for the Capital Asset Pricing Model (CAPM) is: rFDX = rrf + [rM - rrf ]_, what is the required rate of return for FDX stock?

Question 18 options:

a)

10.72%

b)

11.01%

c)

11.65%

d)

11.99%

e)

12.25%